New U.S. Sanctions: Will They Stop More Travel to Cuba?

The U.S. government threw another potential wrench into travel by Americans to Cuba on Nov. 9 when it announced additional sanctions and travel restrictions on the country. This all comes after President Trump in June announced a rollback of the more liberal travel policy set under the Obama administration.

As part of the new policy, the U.S. Treasury Department will now further restrict travel to Cuba by educational or cultural exchange groups, which will now be permitted only for sponsored groups in the United States, and with the participation of representatives from those groups. Those U.S. citizens traveling on “people-to-people” cultural programs will no longer be able to visit the country, except where travel arrangements have already been made, or in cases where these individuals are accompanied by U.S.-based sponsors with special permits.

The U.S. has further tightened its policies in order to channel economic activity away from businesses owned or operated by the Cuban military or intelligence groups. Indeed, the U.S. State Department has published a list of 180 entities. including hotels, stores, rum makers, marinas and a economic development zone at the Port of Mariel, which are believed to benefit the Cuban military, intelligence and security services. U.S. citizens will no longer be permitted to frequent those establishments (see list of hotels below).

The U.S. government’s goal is to channel economic activity away from entities controlled by the Cuban military in order to encourage Cuba to move towards greater political and economic freedom for the Cuban people. As part of that effort, the U.S. Treasury, under its Office of Foreign Assets Control (OFAC), now prohibits U.S. citizens from booking or spending money at a list of hotels, stores and other tourism-related entities that it claims are owned by the Cuban military or intelligence group.

Effect on People-to-People

In accordance with the administration’s policy, OFAC is requiring that all people-to-people nonacademic educational travel be conducted under the auspices of an organization that is subject to U.S. jurisdiction and that sponsors such exchanges to promote people-to-people contact. In addition, such travelers must be accompanied by a person subject to U.S. jurisdiction who is a representative of the sponsoring organization.

Individual people-to-people nonacademic educational travel will no longer be authorized as announced by the President. Certain people-to-people travel that previously was authorized will continue to be authorized where the traveler had already completed at least one travel-related transaction (such as purchasing a flight or reserving accommodation) prior to President Trump’s June 16, 2017 announcement.

In addition, OFAC also is requiring that each traveler under the people-to-people category engage in a full-time schedule of activities that result in meaningful interaction with individuals in Cuba. Such activities must also enhance contact with the Cuban people, support civil society in Cuba, or promote the Cuban people’s independence from Cuban authorities.

Renting a room in a private Cuban residence (casa particular), eating at privately owned Cuban restaurants (paladares), and shopping at privately owned stores run by self- employed Cubans (cuentapropistas) are examples of authorized activities, but in order to meet the requirement of a full-time schedule, a traveler must engage in additional authorized Support for the Cuban People activities.

Effect on Cruises & Tours

So how will this affect existing U.S. cruises and tours to Cuba, many of which comply with people to people travel regulations? Apparently it won’t, according to selected cruise lines and tour operators contacted.

“Based on the new guidelines shared today, we remain certain that the best way to travel to Cuba is via cruise ship,” said Vanessa Picariello, spokesperson for Norwegian Cruise Line, which began cruises to Havana earlier this year. “All of our cruises to, and shore excursions in, Cuba are in full compliance with regulations set forth by the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC), and the new guidelines set forth today.”

Larry Pimentel, president and CEO of Azamara Club Cruises, which is planning cruises that stop at several Cuban ports, including Havana, said his government and legal teams still need to fully review and provide input and appropriate direction on the new U.S. policy on travel to Cuba. “Having stated this, and upon a quick initial review, it appears that our Azamara Club Cruise operations can continue business as usual. We continue to take bookings,” Pimentel said. “You reference the potential of confusion. If this does occur, frankly cruising will be an ideal way to see Cuba within the regulations set forth.”

On the tour front, the new regulations also may not have much of an effect, if any, except possibly on the choice of hotels used on the tour. “We’re still reviewing the new guidelines, but we really don’t anticipate any changes at all in our Cuba operations,” said Tom Armstrong, a spokesperson for Tauck, “The new restrictions do more to curtail individual travel to Cuba, while authorized tour operators like Tauck are still free to bring groups to the island.”

Ronen Paldi, president of Ya’lla Tours, which was pioneered Cuban programs in 2011, said his company will not be impacted by the new regulations, except its ability to book certain hotels for its customers. “Remember, we have been doing Cuba since 2002 whereas the other tour operators started in 2011 all, with no exception, did the people to people programs,” Paldi said. “We use other provisions, and with this happening it will leave us, as before 2011, as the only ones that can do customized FIT and groups. It will be interesting to see how this will all shape up, but it will sure change some of the way others are doing business in Cuba. As for not being able to use the Kempinski, this is a bummer. But we have other nice five-star hotels in Cuba, like Melia Cohiba and Melia Havana that are not owned by the military.”

ASTA Reaction

For its part, ASTA issued a statement that it believed in the fundamental principle of travel freedom, and that the government should not be in the business of telling Americans where to travel or not to travel. “The American people are the best ambassadors of U.S. values abroad, and should be allowed to freely promulgate those values and travel to any destination they wish without restriction from their own government,” said Eben Peck, ASTA’s executive vice president, advocacy.

“Rather than shutting the door to this market 90 miles off our shores, we call on policymakers to enact legislation to do away with the statutory Cuba travel ban once and for all,” Peck added. “While helping our members and their clients comply with the rules announced today, we will continue to advocate toward Cuba travel freedom and look forward to the day it becomes reality.”

Peck pointed out that while the new regulations move the U.S. in the opposite direction of the full opening of the Cuba market that ASTA has long pushed for, they did incorporate several items that it push for and, perhaps most importantly, the rules of the road are now set. “We are confident that our cruise and tour partners and other travel industry stakeholders will adjust quickly to the new rules with an eye toward keeping Cuba as viable a destination for U.S. travelers (and travel agents) as possible,” Peck said.